Jemena and Optimal sign MoU to develop three new biomethane plants in NSW

By Thesshanth Vasudev30 November 2023

Three new biomethane plants have the potential to accelerate Australia’s biomethane industry across parts of regional New South Wales. ARENA’s Bioenergy Roadmap found a biomethane industry could reduce Australia’s emissions by 9 per cent, contribute around $10 billion in extra GDP per annum, and create over 26,000 new jobs by the start of the next decade. Up to 1.5 petajoules of biomethane could be produced as part of a new Memorandum of Understanding.  

Three new biomethane production facilities are a step closer to being developed after major energy infrastructure company Jemena and renewable gas producer Optimal signed a three year Memorandum of Understanding (MoU).

Through the MoU announced today, Optimal Renewable Gas (ORG) will identify suitable sites in regional New South Wales in proximity to agricultural and other waste sources (which are a key feedstock for the production of biomethane) that could produce up to 1.5 petajoules of biomethane, in preparation for building the facilities. In addition, Jemena will undertake feasibility and preparatory work so biomethane can be injected into the NSW gas distribution network.

Biomethane is a renewable gas created by processing biogas which is generated from decomposing organic waste. It is completely interchangeable with natural gas and is, therefore, compatible with all existing gas network infrastructure, gas appliances used in homes and businesses today, and in industrial manufacturing processes.

Internationally, biomethane production is also demonstrating the benefits of a circular economy – where organic waste is diverted from landfill, reducing fugitive emissions and providing renewable energy which can be used to complement other renewable energy such as wind and solar, and displace natural gas sourced from fossil fuel.

ORG’s Managing Director, Mike Davis, said: “We have started assessing projects in NSW to produce biomethane to inject into the gas network. Based on our work to date, we could potentially be looking at somewhere closer to 2-4 petajoules per annum.

“Our near-term aim is to have ten grid-scale plants in production or under development nationally by 2030.”

Additionally, ORG’s Chairman, Dr John Hewson, added: “This is a no-brainer for NSW, establishing a circular economy to optimise the management of organic waste, accelerating the energy transition, improving regional energy security, and decarbonising difficult-to-electrify gas demand whilst returning nutrients back to agriculture.”

Jemena’s Acting Managing Director, David Gillespie, said: “We’re pleased to bring to the table our long-standing energy infrastructure expertise, together with the experience we’ve developed through the Australian-first Malabar Biomethane Injection Plant which – since June this year – has been producing biomethane from organic waste in wastewater and injecting it into the New South Wales gas distribution network.”

“It’s our view that biomethane offers a here-and-now way to help Australia reduce emissions.

“Transitioning the energy system so it meets Australia’s net-zero emission targets is a massive undertaking, and we need to be looking at all available options.

“Continuing to use Australia’s extensive, existing gas networks to transport increasing volumes of renewable gases like biomethane can complement renewable electricity, both in firming the network, and in continuing to power industries and heat homes and hot water systems.”

The potential for biomethane and other bioenergy sources to become part of Australia’s future energy system has been outlined in the Australian Renewable Energy Agency’s (ARENA) 2021 Bioenergy Roadmap. It projects that by the start of the next decade, Australia’s bioenergy sector could contribute around $10 billion in extra GDP per annum, create over 26,000 new jobs, reduce Australia’s emissions by about 9 per cent, divert an extra 6 per cent of waste from landfill, and enhance fuel security.

Research commissioned by Jemena has identified potential sources of biomethane – agricultural waste, waste water and landfills – in the vicinity of its NSW network that could produce up to 30 petajoules of biomethane annually. To put this in context, Jemena’s 386 industrial costumers used around 49.6 petajoules of gas last year.